Applications to cash out super balances for a second time have hit 800,000 in the first 12 days of the financial year, new data from the Australian Prudential Regulation Authority (APRA) shows.
It was a jump of more than 450,000 since the first week of July, with APRA recording 346,000 repeat applications between July 1 and 5.
Super funds received 581,000 applications from members to access their retirement savings in the week to July 12, with 472,000, or 81 per cent, making a request for the second time. Nineteen per cent of claims, or 109,000 applications, were from members applying to withdraw for the first time.
More than $6 billion has been paid to 734,000 members in the week to July 12.
Since the scheme began on April 20, Australians have applied to withdraw $28 billion of their super in total. About 3.3 million super payments have been made, with $25.3 billion paid.
On average, repeat applicants have requested to take out $8,755, while the overall average is about $1,000 lower.
The early release of super scheme, now in its second round, was designed to help coronavirus-affected workers manage the financial impacts of COVID-19 by allowing them to access their retirement savings.
Flat super returns as COVID-19 hits nest eggs
The APRA data on the early release of super comes as new Chant West research shows that median growth superannuation funds, which are 61-80 per cent invested in growth assets such as shares and property, lost 0.5 per cent in the 2019-20 financial year.
But more positive returns of 6.5 per cent were seen in the three months to June 30.
Retirement savings lost 3.3 per cent for the financial year up until April 2020, a signal that funds may have managed to claw back returns in the two remaining months of the fiscal year.
Chant West senior investment manager Mano Mohankumar said it had been a “topsy turvy” year for super balances.
“While the end result was marginally negative, that still represents an excellent outcome given the economic damage wrought by the COVID-19 pandemic in Australia and globally,” he said, adding that super funds have had a near 11-year growth streak until early 2020.
How the super market changed throughout the year
Mr Mohankumar noted that there have been three stages of changes in the 2019-20 financial year.
- In the seven months to January 2020, growth funds gained 6.4 per cent.
- February and March were the worst-performing months. COVID-19 took its toll on the share markets, and funds lost 12 per cent in the span of two months.
- Recovery began in the June quarter, when super balances leaped back 6.5 per cent.
Mr Mohankumar said the results for the financial year were “better than expected”, as the investment portfolios of super funds are well-diversified. Diversification may help protect returns in times when share markets are weaker, he noted.
“The better performing funds over the year were generally those that had lower allocations to Australian shares and higher allocations to international shares and bonds. Funds would also have benefited from having low exposure to listed property and listed infrastructure.”
Traditional diversified super fund performance (results to June 30, 2020)
|Risk category||Exposure to growth assets (%)||Past 1 month (%)||Past 3 months (%)||Past 1 year (%)||Past 5 years (%)|
|All growth||96 - 100||1.1||9.7||-2.1||6.6|
|High growth||81 - 95||1.0||7.9||-0.9||6.7|
|Growth||61 – 80||0.8||6.5||-0.5||6.2|
|Balanced||41 – 60||0.7||4.7||0.3||4.8|
|Conservative||21 - 40||0.5||3.1||1.0||4.2|
Note: Performance is shown net of investment fees and tax. It is before administration fees and adviser commissions.
Source: Chant West.